Virgin USA hasboughtCircleLending.com. Unlike Prosper.com CircleLending handels p2p lending between people that knew each other before the transaction, e.g. friends or relatives. Its purpose is to help structuring and managing private loans. Terms of the transaction were not disclosed.

Our long-term goal, however, is to get a federal lending license. It will solve a lot of problems for us (state rate caps, primarily), but is simply harder to get. Nonetheless, it is something that we are pursuing aggressively. As with just about everything else we do, unfortunately, I cannot give you a specific date. Please understand that it is a huge priority for our business, and we are ushering the process as quickly as we can (unfortunately, it's more a process of waiting on regulators than us actually doing things proactively).

German p2p lending service Smava succeded in raising another 4 million Euro VC from Earlybird after previous cash inflow from private investors was announced just weeks ago. (Source: P2P-Kredite.com blog)

Most changes and discussion around Prosper.com in May related to the impact of the changes Prosper did to the State Lending Limits on May 1st. While Prosper lending is nearly nationally available (46 of 50 stats) it is regulated based on state laws. Since the launch of Prosper several parameters differ depending on the state the borrower is living in:

Maximum interest rate: In states without severe restrictions borrowers can offer up to 30 percent interest rate. Other states are capped to much lower rates (e.g. Pennsylvania allows 6% maximum)

Maximum loan amount. Prosper usually allows borrowing up to $25000. In some states lower amount maximums are imposed (e.g. Vermont – $4000).

You might not believe it but even the minimum loan amount is regulated in some states. In Georgia loans through Prosper must have amounts of at least $3001. Borrowers can deal with this, by borrowing the minimum and directly repaying the unneeded surplus.

Further differences existregarding Late Fees and Failed payment fees

While most users were unsatisfied they had over time accustomed themselves fairly to the situation. Main impact was that in states with low rate caps nearly no loans were founded.

This by state table shows the concentration of funded loans on few states like California, Georgia and Texas while other populous states like Pennsylvania, Tennessee, Ohio und Kentucky saw only a handful of successful loans.

But progress was made. Prosper succeeded in gaining licences for states, allowing higher maximum interest rates in these states.

On May 1st Prosper conducted many changes. For the first time maximum interest rates sank in some states, e.g. in Texas from previously 30 percent to 10 percent. In other states loans for personal purposes are no longer available. Changes apply to all new listings.

The rules got more complicated, since for some states:

different rules for private and business loans were introduced

maximum loan rates are different depending on loan amount

APR is used to determine maximum interest rate, while in other states nominal interest rate is used.

Prosper did not disclose the reasons that led to these changes but explained:

All of the changes being made to our rate and loan amount limits are being made by Prosper on our own accord and are not being mandated by any state or federal regulatory authority. Prosper, like any other state-based lender, must make its own legal analysis and determination as to how various state regulations should be (or will be) interpreted, and establish state-by-state rate and loan amount limits accordingly.

Whether caused by this changes, the high default rates or other reasons: the growth of the count of recentlöy active lenders did slack in the last weeks. While new lenders enter the chart indicates, that numerous lenders stopped reinvesting and are withdrawing.

Borrowers with unsatisfying credit seeking a loan can not use Zopa.com. Instead of just declining these applications, Zopa now sells these leads through Paaleads.com. Brokers and financial advisors can bid to obtain these leads. (Source Mortgagesolutions-online.com)

Paaleads classifies the leads in three categories:

Unsecured loans – homeowners over 10.000 pounds

Unsecured loans – homeowners below 10.000 pounds

Unsecured loans – non homeowners

As the screenshots below (taken today) show, the leads are selling for prices of up to 35 pounds.